The budget line is the boundary between
A) preferred and nonpreferred consumption combinations.
B) affordable and unaffordable consumption combinations.
C) goods and bads.
D) income and expenditure.
E) income and consumption.

Question

Quizplus · Accepted Answer

The budget line represents the different combinations of two goods that a consumer can purchase with a given budget (or income). Therefore, it separates the affordable (on or below the budget line) from the unaffordable (above the budget line) consumption combinations.

The Budget Line Is the Boundary Between